Replies to post #6213 on Biotech Values

[poorgradstudent]

>My question is... with all the day traders and momentum traders looking for events like PARS failure, wouldn't it be a good idea for a previously long investor to:

A) Hold any shares you want to sell until the bounce.

B) Pick up some extra shares on D-Day, then hold for a few days and sell on the bounce to make up a little of the loss from your long shares.<

I interpret your choices as a question of how to trade. I'm not a good trader, so I wouldn't know if or when a bounce is coming, or how big a bounce, etc...

My perspective is that if a biotech has a failed pivotal trial or failed an NDA, then i don't want to be owning its shares, period. So buying after failure is not an option in my book. And guessing about the timing and magnitude of a post-failure bounce is beyond my abilities. But if you consider that most large failures result in a 60% decrease in stock price, is a risky, post-failure trading strategy to recoup 10% of those losses really worth it? In other words, if you're holding a stock that crashes from 10 to 4 dollars per share, is it really worth the additional risk to the downside in order to possibly exit at 5 dollars a share? Up to you, but for me it isn't.

To color my comments, my personal investment account only has biotechs in it. So interpret my comments accordingly.

[mskatiescarletohara]

Aiming and PGS...regarding exiting.

I learned my lesson the hard way years ago when Triangle Pharma announced a clinical hold on it's pivotal in South Africa, stock went from 18 to 5 in a day. It was brutal, loved watching my money vaporize. I sold took a loss and then bought back in the following year when the stock languished in 2-4 range forever. I recouped my money when GILD bought them. In my experience, it's always good strategy to exit when everyone else is when there are clear problems with the FDA and pivotal results. Only buy back in if you know the company inside and out to make any of your money back.

CTIC's Pixantrone has potential to be a worthy drug to advance if Xyotax fails. I do admire management for broadening the pipeline if the first compound fails, I also admire their strategy in obtaining SPAs for their trials too.

MAXM, and GNTA were crucified this year....do they have anything left in the pipeline?

NEOT which is now SPPI had an AD drug fail and they were forced to implement a reverse, now they have restructured the company by marketing generics to pay for their R&D oncologic programs. Their senior management are former BMY execs and they appear to be developing a sound solid business plan. Their Eoquin bladder cancer drug could be an answer for refractory bladder cancer patients, these patients have limited options, when the approved BCG no longer works. No one wants to have their bladder removed, especially men, who this cancer effects.

katie...